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Level 1
posted May 17, 2021 5:33:49 PM

California to Nevada Vehicle Registration Fee

Last year I moved to Nevada and registered my car in Nevada.

TurboTax says this:

Enter your car registration fees
Enter the deductible portion of your car registration fee.
In California, you can deduct the Vehicle License Fee (VLF) portion of your registration fee.
In Nevada, you can deduct the Motor Vehicle Tax you paid on your vehicles.
 
When I enter my Nevada Motor Vehicle Tax , TurboTax gives me a credit on my California Taxes. I don't see a way to adjust this. Shouldn't the Nevada Motor Vehicle Tax deduction only affect my Federal Taxes? There is no income tax in Nevada.

0 2 795
2 Replies
Expert Alumni
May 17, 2021 6:39:43 PM

No. Your Nevada car registration fee will be included on your California income tax return because of the way California computes tax for part-year residents.

 

Part-year residents pay state tax on the California percentage of a base tax amount that includes total 2020 income - total deductions.

 

For example if you made $100,000, split evenly between CA and NV, and had $20,000 in deductions, your CA base tax would be computed on $80,000 ($100,000-$20,000). Say that tax is $10,000. Your part-year CA tax would be 50% of $10,000 (the base tax).

Level 1
May 17, 2021 7:39:48 PM

Thanks for the explanation.